MinFin raises UAH 1.6 bln from local bond sale

Ukraine’s Finance Ministry raised UAH 21.0 mln, USD
8.4 mln and EUR 43.0 mln (a total of UAH 1.6 bln in the equivalent) at its
weekly auction on Dec. 11 after raising USD 0.1 bln in the equivalent
at its auction last week.

The highest auction receipts – EUR 43.0 mln – came
from the sale of 4M local Eurobonds, which were sold to four bidders at an
interest rate of 4.5%. Meanwhile, auction participants didn’t reveal the
interest in one-year EUR-denominated bonds, which were also offered at the
auction.

The auction’s USD receipts came from the sale of 6M,
1Y and 2Y bonds. Two bidders bought 6M bonds for USD 1.6 mln at 6.7%, nine
bidders bought 1Y bonds for USD 3.9 mln at 7.25% and nine bidders purchased 2Y
bonds for USD 3.0 mln at 7.50%.

The government sold 3M UAH-denominated bonds to four
bidders for UAH 7.2 mln at 19.0%, while leaving unsatisfied one bid at 21.0%.
The rest of UAH receipts came from the sale of 6M and 1Y bonds, which were
placed at a unified rate of 18.5%. In particular, seven bidders bought 6M bonds
for UAH 13.5 mln and one bidder purchased 1Y bonds for UAH 0.4 mln.

Evgeniya Akhtyrko: The weekly
local bond auction receipts returned to levels observed before the armed conflict in the Black Sea
affected the confidence of market participants.

The government has two more local bond auctions
scheduled for the current year where UAH, USD, and EUR-denominated bonds are to
be offered. By selling local Eurobonds, the government will try to compensate
its expenditures on redeeming local bonds for USD 132.5 mln this month.

On Dec. 13, the National Bank of Ukraine will
consider revising its key policy rate. If it remains unchanged (which is highly
likely), we won’t see any moves in interest rates on UAH-denominated bonds
placed on the primary market.